Business

SCOTUS Strikes Down Federal Power To Seize Raisins

Daily Caller News Foundation logo
Blake Neff Reporter
Font Size:

The Supreme Court issued a ruling Monday striking down a longstanding federal program that allowed the government to seize raisins from private farmers in order to control prices.

The case, Horne v. Department of Agriculture, was decided 8-1 with Chief Justice John Roberts (Sonia Sotomayor dissented) authoring the majority opinion.

The case concerned a federal policy dating back to the Great Depression, under which a Raisin Administrative Committee was empowered to require raisin farmers to set aside a certain portion of their crop with the intent of keeping prices stable (and artificially high) year to year. Farmers typically received no compensation for the forfeited raisins, which in some years could amount to half the crop. The “reserve” raisins were used in federal school lunches or sold overseas at below-market prices.

In the early 2000s, after the raisin committee forced them to set aside 47 percent of their crop, California farmers Marvin and Laura Horne rebelled, selling their entire crop in defiance of federal regulations. In response, Department of Agriculture regulators fined them $684,000 – $484,000 for the raisins they failed to forfeit and another $200,000 as a penalty. The case has been winding its way slowly through the federal court system ever since.

The contest pitted the Horne’s against the Sun-Maid Growers of California, a large raisin cooperative which supported the government, arguing the raisin forfeitures stabilized a market that was once extreme volatile for participants.

Roberts rejected the stability arguments, instead saying the government was violating the Bill of Rights by taking the private property of farmers without any compensatory benefit.

“In one of the years at issue here, the Government insisted that the Hornes turn over 47 percent of their raisin crop, in exchange for the ‘benefit’ of being allowed to sell the remaining 53 percent,” Roberts writes in his opinion.

Monday’s ruling currently applies only to the raisin market, and not to similar government programs that exist for other agricultural products. Much of Roberts’ decision is spent parsing out the difference between raisins and other goods.

“Raisins are not dangerous pesticides; they are a healthy snack,” Roberts declares at one point, emphasizing that the mundane nature of raisins makes them harder to justifiably regulate. At another point, he distinguishes the raisin program from another involving oysters by holding that “raisins are not like oysters,” since they are grown rather than harvested from the wild.

Still, despite its limited scope, the ruling is a victory for free market advocates, who decried the raisin program as particularly egregious government meddling in a private market.

The ruling should also be a win for consumers, at least in the short term, as it is likely to lead to a drop in raisin prices.

Monday’s ruling isn’t a big surprise, as the justices had openly made fun of the government’s position during oral arguments in April. Elena Kagan described the program as “ridiculous,” while Antonin Scalia quipped that the Hornes would have to be selling some “dangerous raisins” to justify such heavy-handed government intervention.

 

Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.